MOGAMBO GURU: He will probably crap in his Occidental pants

Richard Daughty, the angriest guy in economics -- World News Trust

I was rudely and abruptly awakened by alarm bells ringing. I reflexively shot off an entire clip of expensive ammunition into the darkness before I realized it was not the Mogambo Homicidal Wife Detector (MHWD) that was ringing, but the Mogambo Economic Seismograph (MES). As I switch on the light, my wife peeks out from under the bed, and is yelling, "What in the hell was THAT all about, you crazy stupid bastard?" I calmly reply, trying to be soothing, "Shut your fat yap. It looks like Total Fed Credit fell $1.8 billion last week, and at the same time as foreign banks' holdings of U.S. debt at the Fed decreased by $7.8 billion, too."
I gulp at the news. My wife sees me gulp, and quickly slides back under the bed. An economy based on debt-created fiat currency, like ours, must have a continuously-rising level of debt just to pay the interest on the existing debt, if nothing else. And we need even more rising levels of debt to achieve "growth." And now we don't seem to have it anymore. Again I gulp in fear.

But this is all just statistics proving the onset of the inevitable. The announcement last month by the G-7, of which the USA is a member, was that they all agreed that the U.S. dollar has to be massively devalued to address our gaping, terrifying trade and budget imbalances. The current range of estimates of the total proposed devaluation of the purchasing power of the dollar is between 30% to 50%! For one thing, at the most optimistic, least-damaging 30% total devaluation of the dollar, and further assuming that absolutely nothing else changes except the buying power of the dollar, this means that we'll be buying crude oil for $95 per barrel.

And if you think that "nothing will change" when oil is at $95 (and up!) per barrel and the dollar is 30% weaker, then I am sorry to tell you that you are very, very wrong. And if you further think that not being heavily-armed and heavily into gold and silver bullion is a good idea at this particular point of the boom-bust cycle, then I am also sorry to tell you that you are wrong about that, too.

And while we are talking about the dollar and things that are wrong, we bid farewell to John Snow, who is resigning as Secretary of the Treasury. I don't know whether John Snow was as stupid as he sounded, or whether he was somehow forced to say those asinine things, such as constantly invoking the Laffer Curve argument that low tax rates can mean higher tax collections, or how even THAT ridiculous, special-case over-simplification morphed into the absurd idea that lower taxes automatically produce higher tax revenues! Hahaha! But the United States was not well served by such silliness, except to convince the rest of the world that we are a nation of greedy, raving imbeciles.

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